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5.George C. Marshall: The Marshall Plan

Mr. President, Dr. Conant, members of the Board of Overseers, Ladies and
Gentlemen:

I am profoundly grateful, touched by the great distinction and honor and
great compliment accorded me by the authorities of Harvard this morning. I
am overwhelmed, as a matter of fact, and I am rather fearful of my
inability to maintain such a high rating as you've been generous enough to
accord to me. In these historic and lovely surroundings, this perfect day,
and this very wonderful assembly, it is a tremendously impressive thing to
an individual in my position.

But to speak more seriously, I need not tell you that the world situation
is very serious. That must be apparent to all intelligent people. I think
one difficulty is that the problem is one of such enormous complexity that
the very mass of facts presented to the public by press and radio make it
exceedingly difficult for the man in the street to reach a clear
appraisement of the situation. Furthermore, the people of this country are
distant from the troubled areas of the earth, and it is hard for them to
comprehend the plight and consequent reactions of the long-suffering
peoples of Europe and the effect of those reactions on their governments
in connection with our efforts to promote peace in the world.
In considering the requirements for the rehabilitation of Europe, the
physical loss of life, the visible destruction of cities, factories,
mines, and railroads was correctly estimated, but it has become obvious
during recent months that this visible destruction was probably less
serious than the dislocation of the entire fabric of European economy. For
the past ten years conditions have been highly abnormal. The feverish
preparation for war and the more feverish maintenance of the war effort
engulfed all aspects of national economies. Machinery has fallen into
disrepair or is entirely obsolete. Under the arbitrary and destructive
Nazi rule, virtually every possible enterprise was geared into the German
war machine. Long-standing commercial ties, private institutions, banks,
insurance companies, and shipping companies disappeared through loss of
capital, absorption through nationalization, or by simple destruction. In
many countries, confidence in the local currency has been severely shaken.
The breakdown of the business structure of Europe during the war was
complete. Recovery has been seriously retarded by the fact that two years
after the close of hostilities a peace settlement with Germany and Austria
has not been agreed upon. But even given a more prompt solution of these
difficult problems, the rehabilitation of the economic structure of Europe
quite evidently will require a much longer time and greater effort than
had been foreseen.

There is a phase of this matter which is both interesting and serious. The
farmer has always produced the foodstuffs to exchange with the city
dweller for the other necessities of life. This division of labor is the
basis of modern civilization. At the present time it is threatened with
breakdown. The town and city industries are not producing adequate goods
to exchange with the food-producing farmer. Raw materials and fuel are in
short supply. Machinery, as I have said, is lacking or worn out. The
farmer or the peasant cannot find the goods for sale which he desires to
purchase. So the sale of his farm produce for money which he cannot use
seems to him an unprofitable transaction. He, therefore, has withdrawn
many fields from crop cultivation and he's using them for grazing. He
feeds more grain to stock and finds for himself and his family an ample
supply of food, however short he may be on clothing and the other ordinary
gadgets of civilization.

Meanwhile, people in the cities are short of food and fuel, and in some
places approaching the starvation levels. So, the governments are forced
to use their foreign money and credits to procure these necessities
abroad. This process exhausts funds which are urgently needed for
reconstruction. Thus, a very serious situation is rapidly developing which
bodes no good for the world. The modern system of the division of labor
upon which the exchange of products is based is in danger of breaking
down. The truth of the matter is that Europe's requirements for the next
three or four years of foreign food and other essential products --
principally from America -- are so much greater than her present ability
to pay that she must have substantial additional help or face economic,
social, and political deterioration of a very grave character.
The remedy seems to lie in breaking the vicious circle and restoring the
confidence of the people of Europe in the economic future of their own
countries and of Europe as a whole. The manufacturer and the farmer
throughout wide areas must be able and willing to exchange their product
for currencies, the continuing value of which is not open to question.
Aside from the demoralizing effect on the world at large and the
possibilities of disturbances arising as a result of the desperation of
the people concerned, the consequences to the economy of the United States
should be apparent to all. It is logical that the United States should do
whatever it is able to do to assist in the return of normal economic
health in the world, without which there can be no political stability and
no assured peace. Our policy is directed not against any country or
doctrine but against hunger, poverty, desperation, and chaos. Its purpose
should be the revival of a working economy in the world so as to permit
the emergence of political and social conditions in which free
institutions can exist.

Such assistance, I am convinced, must not be on a piecemeal basis, as
various crises develop. Any assistance that this Government may render in
the future should provide a cure rather than a mere palliative. Any
government that is willing to assist in the task of recovery will find
full cooperation, I am sure, on the part of the United States Government.
Any government which maneuvers to block the recovery of other countries
cannot expect help from us. Furthermore, governments, political parties,
or groups which seek to perpetuate human misery in order to profit there
from politically or otherwise will encounter the opposition of the United
States.

It is already evident that before the United States Government can proceed
much further in its efforts to alleviate the situation and help start the
European world on its way to recovery, there must be some agreement among
the countries of Europe as to the requirements of the situation and the
part those countries themselves will take in order to give a proper effect
to whatever actions might be undertaken by this Government. It would be
neither fitting nor efficacious for our Government to undertake to draw up
unilaterally a program designed to place Europe on its feet economically.
This is the business of the Europeans. The initiative, I think, must come
from Europe. The role of this country should consist of friendly aid in
the drafting of a European program and of later support of such a program
so far as it may be practical for us to do so. The program should be a
joint one, agreed to by a number, if not all, European nations.
An essential part of any successful action on the part of the United
States is an understanding on the part of the people of America of the
character of the problem and the remedies to be applied. Political passion
and prejudice should have no part. With foresight, and a willingness on
the part of our people to face up to the vast responsibility which history
has clearly placed upon our country, the difficulties I have outlined can
and will be overcome.

I am sorry that on each occasion I have said something publicly in regard
to our international situation, I have been forced by the necessities of
the case to enter into rather technical discussions. But, to my mind, it
is of vast importance that our people reach some general understanding of
what the complications really are, rather than react from a passion or a
prejudice or an emotion of the moment.

As I said more formally a moment ago, we are remote from the scene of
these troubles. It is virtually impossible at this distance merely by
reading, or listening, or even seeing photographs and motion pictures, to
grasp at all the real significance of the situation. And yet the whole
world of the future hangs on a proper judgment. It hangs, I think, to a
large extent on the realization of the American people, of just what are
the various dominant factors. What are the reactions of the people? What
are the justifications of those reactions? What are the sufferings? What
is needed? What can best be done? What must be done?
Thank you very much.

　